How to recognise when you are being manipulated with false discounts
False discounts have long been a feature of the home improvement industry. Some companies are taking advantage of the confusion around the new home improvement scheme to create a new false discount.
The Scrappage Scheme and Other Myths.
The following is a description of the methods used to drop the price. This process of negotiation can take between one and two hours on top of the two hours spent on design and measuring.
Salespeople who start at a high price even after the advertised discount has been applied must drop the price and still appear credible. This is not easy to do because it is not credible.
Learning the craft of negotiation is the single biggest difference in success or failure for the salesperson. Do you honestly believe them when they tell you it is half price at £15,000 then still drop another £5,000? With hindsight, probably not, but when you are caught up in the moment, your brain chemistry is making you excited and you want to buy the product. You believe anything if it is made affordable for you, and feel you are given a good deal.
Learning to Play the Game
Some customers are aware that it is all hype. Others become upset at these tactics and can turn nasty if they feel they are being conned. The salesperson needs to be careful to appear genuine. Play the game if it gets the deal that you want, as long as you know the reality, and are manipulating the salesperson and not the other way around.
These false discounts are available. What does not exist is the reasons for them. Depending on what has been decided as a starting price you may be told that certain discounts have already been applied to show ‘goodwill’ and to gain trust. Others are used after the salesperson has assured you that he has given you the best possible price and you still have not agreed to go ahead.
The important thing to remember is that you are the customer and your needs come first. If you ever feel uncomfortable, don’t be afraid to tell the salesperson that you do not want any ‘sales-speak’.
Persistence Pays Off
It often seems that there is no chance of a deal, but if a salesperson keeps going long enough, something is triggered that changes the customer’s decision.
If he keeps chipping away at the price, he knows that he will get to the magic figure that the customer had in mind or they will become brain-washed or exhausted, and give in. Some sign to get rid of the salesperson, planning to phone and cancel. They are often in the house long after the customer has said no because they know that the chance of a sale drops after he leaves.
Government scrappage scheme
This has been around for so long now that I am surprised that it still works. I assume that it is because it is natural to screen out irrelevant information and we do not become aware until we consider buying a product that it relates to. This started in 2009 when the government backed the car scrappage scheme. It was to encourage drivers to scrap cars that were older than 10 years in an effort to boost the flagging car industry and reduce emissions from older engines. A marketing genius somewhere started applying it to windows and others followed suit. It has also been applied to boilers and garage doors. I even ran a tongue in cheek promotion offering it for net curtains. It does not exist.
Companies have been taken to task for this practice and I notice it is now reworded as ‘scrappage scheme’, dropping the word ‘government’. The company may recycle and pick up a small amount for waste products, but the amount is irrelevant compared to the discount offered on it.
Advertising Board Outside Your House Discount.
Most workmen will put a board up while they are working on your premises. It is a good source of advertising. Most customers do not mind this at all, but it is still another ploy. You will hear something like this:
‘I can give you a discount if you are happy for us to display our board outside the house while we are working. Would you be happy with that?’
Everybody says yes to this. You are going to have a great big van with their name emblazoned on it outside your house, why would you object to a tiny sign? When you say yes to this, the salesperson has heard another buying signal. If you say yes to a board, as far as he is concerned, you have indicated that you are going to buy.
The Show-home Discount.
You are offered a discount if you are willing to have photographs taken of your installation for a marketing brochure. There are only a few places left for this and your salesperson will no doubt offer to call his manager to reserve this for you.
During this conversation, which will take place in your presence, it will be clear that he is told that it is the last place available.
‘I may also be able to give you a ‘show home discount’ if you are happy for us to take photographs after the installation is finished. I’ll need to check, as when I looked yesterday, there were only two slots left for this period.’
(Goes back to his calculations.)
‘If I can get that discount for you, the price would then be £????. That’s better isn’t it?… and if you are happy to give us genuine feedback of your experience on Trustpilot, I’ll knock another £50 off. Is that all right with you?’
Can you see how subtle this is? There is no pressure. It is still a friendly chat and he appears that he is acting in your best interests. Customers believe this to the point that they worry that there will not be a slot for the show home discount and ask for it to be checked. The salesperson will make a phone call. There is always a manager on duty to take these calls, no matter how late in the evening. This is what you may hear:
Hello John, I’m with Mr. and Mrs. Prospect. and I want to use a show home discount but when I checked yesterday there were only two slots left. Can you have a look for me?
(Waits a moment while the manager waffles on or tells a joke.)
‘You’re joking, that was quick.’ Well look, the Jacksons are not being installed for a while, can you give me their code and I’ll put one in for them in the next period.’
‘No, that’s not my problem. I’m not giving up my code for someone else. I’m using it for my customers or I’ll keep it allocated for the Jacksons.’
Puts the phone down and turns to the customer to explain.
‘He says there’s someone else waiting for a code, but I’ve reserved it for you. So, I can confirm the price of £???? Shall I do the paperwork?’
It is rare that a customer does not sign up having gone through this process.
Photos of installations are rarely used in marketing as without the use of special lighting, it is difficult to take good quality photographs. This discount does not exist.
The End of Run Discount.
There is no such thing as an’ end of run’. End of what run? The run never ends. This is used to apply to the manufacture of shutters or window frames. It is almost ridiculous but used because the customer does not know about the manufacture of the product, so it can sound feasible. It works like this: A phone call to the manager is made.
‘Hi Ben, I’m with Mr. & Mrs. Prospect in Swindon and I’m a little bit off the price they want to pay. It’s only a 12-metre run, do you think I could have extra discount for them if we can squeeze it on to the end of the October run. I think it closed yesterday? Can you check for me?’
The manager will call back 5 minutes later. During this time, you have become anxious because the fear of loss is kicking in. Luckily the sales manager delivers the fantastic news that they have managed to ‘squeeze you in’ if you can decide ‘tonight’.
Flexible Installation Date Discount.
While it is true that installations are delayed, and dates are juggled to try to keep the installers in work, this is rare. There is a standard delivery time and the installation date is arranged for a few days after so flexibility in the schedule is not feasible. It is another label to put on a discount to sound credible after saying that all the discounts have been applied.
‘As you’ve already said that you are not concerned about delivery dates, if I can put you down as flexible, I could give you another £350 off. It means that your installation could be up to one week early or late. Is that ok with you?’
Supply and Demand Discounts.
The level of business that a home improvement company does is not consistent throughout the year. The busiest times are January, March and October – November. The quietest times are December and the summer holiday period. However, the company must keep their staff and contractors consistently in work, so will try to spread the load by offering discounts to fill in the gaps. For example, December is busy because of the rush to install before Christmas. Those customers who are not concerned about Pre-Christmas installation may be offered an extra discount to delay installation until January which is a quiet time for installation.
During busy times, discounts will be lower as they struggle to keep up with demand. It naturally follows that they will be higher at quiet times. Often these discounts are announced to the sales team with an incentive, offering additional bonus or commission.
Carbon Footprint Discount.
If the salesperson senses that the customer is on the verge of a decision and needs a little nudge, then he will bring in the ‘carbon footprint’ discount. He cannot mention this too early as to do so would show that he expects to sign on the day and put the customer on the defensive. It is usually the last discount unless he is forced to go to the last resort and use the ‘error account’.
‘Look I’ll tell you what. I didn’t mention it earlier because I know you don’t want to go ahead today, and that’s fine. I just wanted to let you know that the lady that I saw this morning also didn’t want to make a decision today, but because she wanted to buy at the best price, I was able to give her the carbon footprint discount. £250 (or however much he needs) is worth saving I think.
If we had to visit everybody twice, we would only see half the number of customers, double our fuel bill and employ twice the number of agents, which would make our sales meeting double the size. You can imagine how much extra this would cost the company. Does that help get to the price that you wanted to pay, bearing in mind that you have nothing to lose by securing the price, and if you do feel it’s not right for you, you have 14 days to cancel.’
If the customer hesitates, he will point out that he has no control on that one as it is removed from his computer when he reports a ‘no sale’ later. Again, he is stoking that fear of loss.
A genuine carbon footprint discount does not exist. It is another way of reducing the price while appearing credible when he has already said he has done all he can for you.
Just When You Think it’s All Over.
The salesperson has given you the best price he can while still retaining enough to earn decent money. At this point, he will appear to have accepted that you are not buying and is packing up to go. The pressure is off you and you relax thinking he is finally going to leave.
It goes like this:
Salesperson. ‘Mr. & Mrs. Prospect, I appreciate your time and I’m sorry we couldn’t help you on this occasion. Can I ask you, because my manager will ask me, was there anything I could have done tonight that would have changed your mind?’
The customer is pleased at this point, thinking that there has been no pressure and they are let off the hook.
Customer. ‘No, we like to take our time and get a couple of quotes before we make a decision.’
Salesperson. ‘That’s great thank you. So, you wouldn’t have signed even if it was half price?’
Customer. ‘Well if it was half price… (brain signals start firing at the prospect).
Salesperson. ‘Now you know I can’t do it at half price, I’ve given you all the discounts I can reasonably give. But you have just indicated to me that if the price was right you would be willing to go ahead. What would you reasonably be prepared to pay?’
You have let him back in, just when you thought it was over. The customer will make an offer, depending on how far off the price, the salesman was. If the offer is within the price range, the salesperson will accept it and sign the deal. If it is way off, he may negotiate somewhere in between, but bearing in mind that he has told you that he has given all the discounts that he reasonably can, he needs to make it credible, so he may then phone the manager or use the ‘adjustment account.’
If the customer replied, ‘no, not even at half price,’ there was never a chance of a sale in the first place.
If necessary, if your offer is feasible, he will give in and meet your price. Having negotiated the price that you wanted, you are hardly likely to say no.
This is also known as the error account, supplement account or anything else that the salesperson can come up with. It is used as the last possible resort.
‘There is one more thing I can do. It’s a bit risky for me so I don’t usually do it until the end of the month. We have what is called the error account. The process used in quoting for your conservatory/kitchen/blinds is complex and it is easy to make a minor mistake. If, for instance, I forgot to order a décor panel (or missed a drain), I would be able to use the error account to give it you free of charge without it affecting my commission. If we don’t use the error account, we get a bonus at the end of the month, but I prefer to use it for a customer that can’t quite meet our price. You can appreciate I can only use it once but with that in mind, I can get closer to your price. Will you meet me half-way at £7,500?’
Loading the Price Before Dropping.
Price loading is different from starting at the highest retail price. I’ll use the example of conservatory blinds. At the company that I worked for, there were a lot of extras available. We were taught to start by adding in all the extras and designing the most expensive blinds possible. Adding these to the order made a big difference to the commission as they paid bonuses on top of the standard percentage.
The sales presentation points out that the company is different from the others because as part of the service, it offers conservatory valeting, a five-year service plan and includes furniture. These extras add £2-3,000 extra to the order but it gives the salesperson a means to reduce the price before he eats into discount and commission. He would also start by quoting for an automated roof and may quote individual blinds instead of doubling up where he can.
Imagine that he has delivered a price of £13,000 for all the bells and whistles and the customer falls off the chair in shock saying that is almost the cost of building the conservatory. (They often said that.) Doubling up the blinds, removing automation and the extras, which he would do in stages, brings the price right down to £7-8,000. This already seems like a massive reduction and some will agree to this price, not realising that there is still a couple of thousand pounds’ worth of discount available.
What Type of Company Uses False Discounts?
In general, the purpose of this website is to warn customers of the tactics used by commission-motivated salespeople who represent the larger national companies. Smaller local companies do not tend to use high-pressure sales tactics and false discounts because they do not have the ‘know, like and trust’ status to get away with it. Obviously there are cowboy tradespeople so take your time to consider your supplier and do not give in to any pressure tactics that encourage a decision before you are comfortable.
This information doesn’t just apply to glazing companies such as Anglian, Safestyle, Everest and many others. It also applies to almost all other home improvement companies that rely on commission only or commission motivated salespeople.
Sharps, My Fitted Bedroom and Hammonds for fitted bedrooms.
Wren and Magnet for kitchens along with Homebase, B&Q and Wickes.
Thomas Sanderson, Hilarys and 247 blinds.
DFS and SCS for sofas.
This type of marketing is driven by consumers. It gives the biggest response. It is now part of our culture but that doesn’t mean that it is right.
‘I have written ‘salesperson’ as a description suitable for male and female but where it is necessary to write ‘he’ or ‘she’, I have chosen to write ‘he’ rather than the clumsy use of both. Males still dominate the sales industry. It does not imply that women can be trusted more than men. That is not the case’.